Contemporary Trends in Organization Design Chapter Thirteen Contemporary Trends in Organization Design ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e

Factors Associated with Organizational Excellence Corporate Culture Climate of trust Sharing information Productivity through people Long-term view Valuing adaptation and learning Organization Design Simple form, lean staff Empowerment to increase entrepreneurship Horizontal structure and collaboration Electronic technology, e-commerce Balanced measurement and control Top Management Leadership vision Bias toward action/ change/learning Foundation of core values Facilitating knowledge management Strategic Orientation Close to the customer Fast response Clear business focus and goals Establishing inter-organizational linkages

Four Stages of International Evolution Domestic II. International III. Multinational IV. Global Strategic Orientation Domestically oriented Export-oriented, multidomestic Stage of Development Initial foreign involvement Competitive positioning Explosion Structure Domestic structure plus export department Domestic structure plus international division Worldwide geographic, product Matrix, trans-national Market Potential Moderate, mostly domestic Large, multidomestic Very large, multinational Whole world Sources: Based on Nancy J. Adler, International Dimensions of Organizational Behavior (Boston: PWS-KENT, 1991), 7-8; and Theodore T. Herbert, “Strategy and Multinational Organization Structure: An Interorganizational Relationships Perspective,” Academy of Management Review 9 (1984): 259-71.

Matching Organizational Structure to International Advantage When Forces for Global Integration are . . . And Forces for National Responsiveness are . . . Strategy Structure Low Export International Division High Globalization Global Product Structure Multidomestic Global Geographic Structure Globalization and Multidomestic Global Matrix Structure

Domestic Hybrid Structure with International Division CEO Human Resources Corporate Finance Research & Development Electrical Products Division Scientific Products Division Medical Products Division International Division Europe (Sales) Brazil (Subsidiary) Mid East (Sales) Staff (Legal, Licensing)

Partial Global Product Structure Used by Eaton Corporation Chairman Law & Corporate Relations Engineering President Finance & Administration International Regional Coordinators Global Automotive Components Group Global Industrial Group Global Instruments Product Group Global Materials Handling Group Global Truck Components Group Source: Based on New Directions in Multinational Corporate Organization (New York: Business International Corp., 1981).

Global Geographic Division Structure CEO Pacific Division European Division Latin American Division Canadian Division Corporate Staff Long-term Planning Product Coordinators

Global Matrix Structure International Executive Committee Country Managers Germany Norway Argentina/ Brazil Spain/ Portugal Business Areas Power Transformers Transportation Industry Local Companies

The Empowerment Continuum Mini-Enterprise Units High Self-Directed Teams Cross- functional Teams Responsible For Decision Process and Strategy Quality Circles Participation Groups Make Decisions Degree of Empowerment Suggestion Programs Participate In Decisions Job Redesign/ Enrichment Give Input Have no Decision Discretion Low Employee Skills Required Few Many and Complex Sources: Based on Robert C. Ford and Myron D. Fottler, “Empowerment: A Matter of Degree,” Academy of Management Executive 9, no. 3 (1995): 21-31; Lawrence Holpp, “Applied Empowerment,” Training (February 1994): 39-44; and David P. McCaffrey, Sue R. Faerman, and David W. Hart, “The Appeal and Difficulties of Participative Systems,” Organization Science 6, no. 6 (November-December 1995): 603-27.

Stages of Organizational Decline Blinded Inaction Faulty Action Crisis Dissolution

Creating a Learning Organization Workbook Activity Aspects of the ideal learning organization Typical behaviors of this aspect Results of these behaviors Blocks to achieving these results Measures of progress EXAMPLE: Employees feel the work they do has meaning They display energy and enthusiasm when they work The team is more motivated and new ideas are generated There is a lack of clarity on how tasks help fulfill mission Employees talk about how they are fulfilling an important mission 1. 2. 3. 4. 5. 6.